RIN Pricing and RIN Markets

Washington, DC

July 7, 2015

Susan Lafferty, Partner

David McCullough, Counsel

Sutherland Asbill & Brennan LLP
Sutherland Forward Looking Views Are Based Only on 

Public Information and Subject to Change

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Sutherland’s views in this Presentation and any attendant

discussions are based on publicly available information, and not

on any client, confidential or private information. Sutherland’s

views are solely ours and not intended to represent the views of

any company or person. Any of our predictions, forward looking

views and analyses are subject to change at any time and for

any reason.
RFS Mandates – 2014 Proposed

Total Renewable Fuel – 15.21 billion gallons

(D6 + D3, D4, D5, D7 RINs)

Advanced Biofuel – 2.2 billion gallons

(D5 + D3, D4, D5, D7 RINs)

Cellulosic Biofuel – 0.017 billion gallons

(D3, D7 RINs)

Biomass-Based Diesel – 1.28 billion gallons

(D4 RINs)

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Total Renewable Fuel – 36.0 billion gallons

Total Advanced Biofuel – 21.0 billion gallons

Cellulosic Biofuel – 16.0 billion gallons

Biomass-Based Diesel – At least 1.0 billion 

gallons

RFS Mandates – 2022 

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Market Reaction to Proposal

 2014 and 2015 Markets Reacted as Expected

 2014

• Market was anticipating an ethanol number at the high end of EPA’s ranges.

• Actual oversupply of RINs due to additional biodiesel production.

• Market was anticipating an advanced number at the high end of EPA’s range.

• Actual RIN generation – exports were much greater. This resulted in a higher Advanced number and 

unanticipated demand for RINs.

 2015

• Market for ethanol and biomass-based diesel RINs mirrors 2014 as demand is 

approximately at 2014 production.

• Some differentiation between 2014 and 2015 for Advanced RINs because market is somewhat 

uncertain where excess production is going to come from

 2016

• Some thought that EPA’s gasoline consumption figure may be low, resulting in 

additional ability to blend ethanol and more ethanol RINs available. Market is not 

yet anticipating this, but investment banks are anticipating gasoline consumption 

increases in 2016 (EPA anticipates a decrease).

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RFS Announcement and D6 RIN Prices 

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RBOB and Ethanol prices (left axis) compared to D6 RIN prices (right axis). Source: PFL Markets Daily
RIN Prices: A Volatile Market Tied to Regulatory Action

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2015 and 2016 Standards: Low Gasoline Prices = More 

Ethanol and Higher RFS Standards

 RFS standards will increase significantly if gasoline consumption 

increases this year and next.

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2014 RFS Proposed Volumes

Proposed Volumes for 2014 Initially Proposed 

2014 Ranges in 

November 2013

Net RINs Generated 

in 2014 (Excluding 

RINs Equivalent to 

Exported Volumes)*

Projected 

Available 2013

Carryover RINs

RFS Category EPA Proposed 

Volume

EPA Proposed 

Percentage Standard

Statutory Volume 

Required with No EPA 

Adjustments

Total Renewable Fuel 15.93 billion 9.02% 18.15 billion gal. 15.0-15.52 billion 16.2 billion ~1.4 billion

Cellulosic Biofuel (D3 

& D7)

33 million .019% 1.75 billion gal. 8-30 million 33 million 0

Biomass-Based Diesel 

(D4)

1.63 billion

(RIN equivalency of 

~2.5 billion)

1.42% ≥ 1.0 billion gal. 1.92 billion 2.6 billion ~400 million

Total Advanced (D3, 

D4, D5, D7)

2.68 billion 1.52% 3.75 billion gal. 2.0-2.51 billion ≤2.8 billion ~400 billion

Other RINs (D6)

(Not a mandate)

13.25 billion N/A 14.4 billion 12.49–13.52 

billion

13.5 billion 1 billion

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*These numbers are approximate and based on Energy Information Administration (“EIA”) data for 2014 export volumes. These 

numbers also assume that all ethanol exports were satisfied through the retirement of D6 RINs.
2015-2016 RFS Proposed Volumes

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Proposed Volumes for 2015

RFS Category EPA Proposed 

Volume

EPA Proposed 

Percentage 

Standard

Statutory Volume 

Required with No EPA 

Adjustments

Total Renewable Fuel 16.3 billion 9.04% 20.5 billion gal.

Cellulosic Biofuel (D3 & 

D7)

106 million .059% 3.0 billion gal.

Biomass-Based Diesel 

(D4)

1.7 billion

(RIN Equivalency of 

~2.6 billion)

1.41% ≥ 1.0 billion gal.

Total Advanced (D3, D4, 

D5, D7)

2.9 billion 1.61% 5.5 billion gal.

Proposed Volumes for 2016

RFS Category EPA Proposed 

Volume

EPA Proposed 

Percentage 

Standard

Statutory Volume 

Required with No EPA 

Adjustments

Total Renewable Fuel 17.4 billion 9.63% 22.25 billion gal.

Cellulosic Biofuel (D3 & 

D7)

206 million .114% 4.25 billion gal.

Biomass-Based Diesel 

(D4)

1.8 billion 1.49% ≥ 1.0 billion gal.

Total Advanced (D3, D4, 

D5, D7)

3.4 billion 1.88% 7.25 billion gal.
Renewable Fuel Imports and Exports

 Very little pressure to import sugarcane ethanol in 2015 (although a 

slight increase since 2014).

 Increase in pressure to import sugarcane ethanol, biodiesel and 

renewable diesel in 2015. 

 Most likely this will take the form of increases in renewable diesel imports.

 Ethanol exports will continue to take the excess ethanol production 

that is above E10. 

 2016 biodiesel exports likely to drop dramatically. 

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Imports of Ethanol

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Imports of Biomass-Based Diesel

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Exports of Ethanol

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Exports of Biomass-Based Diesel

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YTD Diesel Imports 

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YTD Biodiesel imports compared to previous years

Source: Goldman Sachs Global Investment Research

2015 Biodiesel import source countries 

Source: Goldman Sachs Global Investment Research
Biogas: Cellulosic RIN Generation Will Increase if 

Registrations are Processed

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Biogas: Incentives for Biogas under the RFS Skyrocket: 

Decoupling of Natural Gas and Crude Prices

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State Actions: West Coast Creep

= +

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Washington State's Leadership on Climate Change:

2009 Executive Order

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Jones Act: Costs and Opportunities

 Opportunities: Blending at Terminals in the Virgin Islands 

20 and Caribbean; Investments in US Flag Vessels

Shipping Rates to U.S. Northeast Refineries ($/barrel)

Origin Rate

US Gulf Coast $5.00 - $.600

Eastern Canada $1.20

Nigeria $1.45-$1.70

Saudi Arabia $1.90

Source: Platts Oilgram (Sept. 9, 2013) and McGraw Hill Financial, January – April 2014.

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Regulatory Pressure to Export Gasoline and Diesel 

Continues

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Jones Act

EXPORTS FROM THE UNITED STATES
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Sutherland Partner Susan Lafferty 

Susan Lafferty advises refiners, commodity traders and renewable fuel 

producers on the ever-evolving landscape governing the trade and 

movement of refined products, crude oil and renewable fuel. Susan leads 

the Firm’s Fuel Group which focuses on the regulatory and commercial 

issues related to EPA's Renewable Fuel Standard (RFS) program, RIN 

trading, and state low carbon fuel standards. She is the go-to for EPA 

enforcement actions, having represented over a dozen entities in RIN 

enforcement actions. 

In addition, Susan works with clients to develop risk management and 

mitigation tools to address potential spills or releases that may occur when 

transporting and storing commodities like crude oil, distillates, liquefied 

natural gas and coal; this includes counsel on the developing requirements 

and best practices for crude and ethanol by rail. Susan had a key role in 

overseeing the Oil Pollution Act (OPA) claim process related to the 

Macondo incident. Susan is a sought after speaker on the RFS and 

renewable fuel programs, as well as risk mitigation and management.

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Susan Lafferty, Partner

Sutherland Asbill & Brennan LLP

Washington, D.C.

Susan.Lafferty@Sutherland.com

202.383.0168
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Sutherland Counsel David McCullough

David McCullough, Counsel

Sutherland Asbill & Brennan LLP

New York; Washington, D.C.

David.McCullough@Sutherland.com

212.389.5064

David McCullough counsels producers, refiners, commodity traders and distributers 

on the physical movement and trade of crude oil, petroleum products, and 

renewable fuels, including on the U.S. Renewable Fuel Standard (“RFS”), state low 

carbon fuel standards (“LCFS”), the Jones Act, and shipping crude oil by rail. His 

extensive practice extends from policy analysis to commercial concerns and from 

regulation to enforcement proceedings.

David has significant experience in the implementation and enforcement of the U.S. 

RFS and state LCFS policies. He is the author of many frequently used provisions in 

RIN and LCFS credit transactions and served as counsel in the drafting of LEAP’s

Master Agreement for LCFS Credits. He represented a significant number of 

companies in RIN enforcement proceedings that led to the implementation of the 

EPA’s Interim Enforcement Policies and Quality Assurance Program. David coauthored the Bipartisan Policy Center’s Whitepaper, “Options for Reforming the 

Renewable Fuel Standard.” He is a frequent speaker and is quoted extensively in 

the press on RFS and LCFS issues.

David has also been on the cutting edge of the other key issues of the day 

impacting the movement of crude oil, petroleum products and renewable fuel. David 

counsels clients on shipping by rail, including liability in the event of an accident. 

David has represented shippers in response to some of the largest accidents 

involving crude oil shipped by rail. David also frequently counsels clients on Jones 

Act issues and exemptions and successfully secured the last waiver of the Jones 

Act (Hurricane Sandy in 2012).

David graduated cum laude from Vermont Law School, serving as the 

environmental editor of the Vermont Law Review.
CIRCULAR 230 DISCLOSURE: Any advice provided in this 

outline concerning a federal or state tax issue is not intended 

or written to be used, and cannot be used by the taxpayer, for 

the purpose of avoiding penalties that may be imposed on a 

taxpayer.

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